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February 02, 2005

Industry Comment #10--Is Custom Stock Good for Artists?

My company, Index Stock, recently announced a partnership with OnRequest Images to start supplying Index customers with a new stock image product called, "Custom Stock." The announcement was well received by Index's artists, but a number of outside artist organizations have expressed concern and dismay, about this move.

Index's paramount concern is serving its artists. As Index's CEO, I must always put their interests, first. My artists were generally happy about the deal, so I could stop there. However, if possible, Index should also respect the sensitivities of the art community as a whole. As one of the few independent stock agencies left, we have a responsibility to encourage high standards for our part of the stock industry. Therefore, I have tried hard to listen to and understand the arguments against Custom Stock. Unfortunately, I disagree with the issues that have been raised, and continue to believe that Custom Stock is good for artists in general, and our artists, in particular.

Before I go further, I need to explain how Custom Stock works--especially in the context of Index Stock's overall operation. Custom Stock is not an assignment photography product. Instead, it is a way of accelerating the
production and delivery of stock images. Index salespeople only refer customers into the Custom Stock process,
when they have determined that the image the customer needs is not in Index's file
of existing images. Further, they will
only refer opportunities that are “stock” in nature—where the images that are
produced can be used more than one time, by multiple customers.

When our Index salesperson can't find the image a customer needs that "ought to be in the file," he or she suggests that the customer try our Custom Stock product. Our salesperson confirms that the customer can wait at least three days to get the image and that he or she is willing to pay at least $1,000 for the use. The salesperson then writes up the customer's request and sends it to OnRequest Images. One of their editors then contacts the customer to further discuss the request and to negotiate terms for the planned uses. If they agree that the use fits the Custom Stock profile, they send the request out to be reviewed by artists.

When an Index customer is offered Custom Stock, Index
artists will get “first pick” on the resulting Custom Stock request. Our
artists will be shown the customer’s need and how much the customer would pay
for the right images. They will then be
offered the chance to produce the image. If our artists are not interested in the opportunity, our partners at
OnRequest show the opportunity to other, non-Index-affiliated artists.

As with regular stock, the customer will make the final
choice of which Custom Stock image to use. However, all of the images produced for a customer request by Index artists, are sent to Index and reviewed as stock submissions, by Index’s editors. Many will be suitable for inclusion in Index's stock library. Because the entire Custom Stock process is
digital, it is easy to get Custom Stock images through Index's editing and
metadata process and into its on-line system. Therefore, even images that are not chosen by a Custom Stock customer, have a good opportunity to make money for our artist.

In summary, there are three benefits to artists, from the Custom Stock program.

1. Direct market information. Index artists get to hear our customers' stock image requests. They can be sure that any images requested are not currently in our library, and in most cases are not available anywhere in the stock image market. Therefore, our artists are being shown exactly where the "holes" are, in the market.

2. An opportunity to earn money immediately from stock shooting. In most cases, at least one of the artists who respond to a Custom Stock request will get a $1,000+ license. There is no equivalent immediate benefit, from the regular stock image submission process. Even when artists listen to our "want lists," we can't guarantee that a customer will show up with the "want" we have identified.

3. Low cost to put material into the market. In many cases, our artists may have the image the Custom Stock customer needs in their files. They may just not have gotten around to submitting it to our library (or may have thought it wasn't a good subject for stock!). Because the submission process is digital, and rolls into the front end of our traditional stock editing process, Custom Stock is a low-cost and simple method of getting our artists to submit more images for stock, more often.

Note that all three of these benefits come without any direct penalty to those who don't wish to participate in the program. (Fewer than 1% of those we invited to join, refused.)

Of course, those who are against Custom Stock feel that it produces an indirect penalty on all artists and stock agencies, from "cheapening" the assignment market. As far as I can tell, five major artist organizations have now announced their opposition to this product. They include the SAA, ASMP, APA, PP of A, and EP. To fully understand their perspective. you should take a look at the extensive statement released by SAA (this link is on the ASMP site, but is the SAA document) and a lengthy Q&A session between the ASMP and the CEO of OnRequest Images, David Norris.

Although it subjects me to some risk (lest I neglect or trivialize an argument), I will summarize the objections as follows:

1. Custom Stock is really "competitive spec." Professional photographers have steadfastly refused to produce art and provide it to customers, on a speculative, "free inspection," basis. Negotiating a fair fee in advance of performing work, is a cornerstone of the assignment business. Most artists know to make these arrangements in writing, and regularly enforce them when needed, to ensure that the financial risk of their shoot is on their client, not them. However, Custom Stock requests are different from most, if not all, assignment requests. They are of stock-related subjects, not product or location-specific subjects. Further, OnRequest manages the selection of the artists who will participate in a request. They have the same objective that a stock agent would have--to maximize the total revenue from a project. So, they will tend to bargain hard with the customer, on behalf of the participating artists. The intra-artist competition is based on image quality, not favoritism. OnRequest will generally show the best images from all of the artists who work on a shoot. Finally, while Custom Stock requests are offered "openly" at a "suggested" price, an artist can counter-offer against this price or ask for money to help with shoot expenses. Overall, whether or not an artist undertakes a particular request or wins business is similar to whether or not he or she decides to attempt or accept any money-making opportunity--including bidding on a "regular" assignment or joining a stock agency.

2. The "requests" in a Custom Stock program are not likely to result in images that are more generally marketable. Probably the best way to assess this claim, is to look at the images that have resulted from recent requests. This link goes a page on the OnRequest site that shows some images done in the past two months. I think that a lot of them are pretty licensable in the market as a whole. We recently got our first set of images from OnRequest under our new program. Young people biking, a couple eating outdoors, a worker on an oil rig... My editors were very pleased with their relevance and fit to our market. We are experts in marketing photography. Our expert opinion is that Custom Stock works to generate solid, licensable material.

3. Custom Stock changes the "balance of power" between customers and artists. Instead of a one-to-one relationship between a photo user and an assignment artist, there is an intermediary between the artist and the customer. However, this argument should be looked at from another direction. In stock image licensing, there is already an intermediary between the customer and the artist. Up to now, the intermediary (a company like Index Stock) has kept all of the market information and customer contact to itself. With Custom Stock, the balance of power shifts slightly TOWARDS the artist, as he or she gets direct access to customer needs. That should be seen as a positive step--especially if an increasing number of stock-oriented artists begin marketing their work to customers, directly.

4. Custom Stock "provides a client with a Mercedes at a VW price." This pithy analogy is from an especially smart friend of mine, in the industry. I understand the risk that some clients who like Custom Stock will stop using their existing assignment sources or ask for cheaper prices on their next assignment job. On the other hand, as long as we focus on stock-type images, we are not cutting into the heart of the assignment business. Instead, we are just finishing the transition that started fifty years ago, when agencies first started selling stock.

I thought I'd close this overlong post with a recent example. A customer called to ask us for an image of a hardware store with empty shelves. They wanted a store owner who looked happy about how well his inventory had sold.

This is a great concept. Unfortunately, it is not something I could find in our file, on Getty Images, or on Corbis' site. (Getty and Corbis each returned "zero results" to a search of "h.ardware store owner happy empty." We at least gave this image, which is kind of close. I suppose I could have searched the other one hundred plus sites I know about...but there is a law of diminishing returns, here!) Our normal price for the use they wanted to make (1/2 page one time in a 20,000 circulation trade show booklet) would have been $475. The customer was willing to pay more than $1,000 for the right shot.

Could Index license images like this, as stock? I think so. We never have enough retail images. Empty shelves and a sad look (easy to throw in, while shooting a happy look) could imply the opposite--not enough money to get good inventory. That is great for bank and finance company use. Swap in a shot with one box on an otherwise empty shelf, and you have a "lack of variety" concept. Good for distributors and jobbers. The planned use was tiny and would not limit us from other, bigger uses. And, the price offered was well more than the cost of doing the shoot, for the artist.

One artist responded to the request, and shot it. Unfortunately, the customer didn't like any of the images. So, he hired a local photographer, and directed the shoot, himself.

Is this a good end result or a bad end result? I think it is good for the industry as a whole. The customer was encouraged to feel that a custom image was worth MORE than a stock image. The customer was shown that stock could be flexible and might meet more of his needs than he thought. But, he also learned its limits and ended up paying for true assignment work. The artist was out the minor cost of the shoot. However, he created a set of images that are right in step with the needs of our market, and probably will generate good money, going forward. OnRequest did some editing and coordinating work, that it didn't get paid for. But, it has another customer who understands the Custom Stock process. Index tried to help a customer, and failed to fulfill his needs. But, at least we went an extra step to help--customers like that!

In summary, I deeply respect the organizations that oppose it, and the people who are members of them. However, I think they are fighting the wrong battle, when they object to Custom Stock. Instead, they should be vigorously opposing those stock agencies who are hiring artists and doing "work for hire" assignments, for their customers. These agents are the real threat to the structure of both the assignment business AND the stock industry. Their drive to own the images in their file is counter to all of the precepts that both these organizations and Index have defended, for years. Each time these agencies take an independently-produced best seller and reshoot it with an in-house artist, these artist organizations should protest it as a flagrant violation of the original artist's copyright. Each time these agencies put a image from their "in-house" collection ahead of those from outside artists, these organizations should insist that the agency treat all contributors equally and fairly.

I recall the furor over on-line libraries, in the mid 1990s. Remember how everyone was worried that putting images on the Internet, would wipe out their value and turn images into a commodity? Well, it did make them easier to steal, but it also brought them within the reach of a huge number of new users. Custom Stock is progress--and positive progress at that. Instead of trying to stop it, we need to welcome the opportunity to shape it to support the needs of our artists and our industry.

Comments

Hello Bahar,
I hadn't heard of this stock concept before but your arguments in its favor sound logical to me. Perhaps you could send email alerts to interested photographers when client requests come in?
Kind regards,
David